We are using two approaches to identify and isolate genes involved in the regulated growth and differentiation of the mammalian embryo and fetus. The first of these is insertional mutagenesis, in which mutant phenotypes are generated by the insertion of exogenous DNA into a gene. This also creates a molecular tag at the mutant locus, providing direct access to the gene. A screen of transgenic mouse strains derived from embryonic stem (ES) cells deliberately infected in tissue culture with retroviruses identified 4 recessive prenatal lethal insertional mutations. One of these is a mutation of the nodal gene. Another is a mutation of the gene for Sumo/sentrin specific protease 1 (SENP1), a recently identified protein involved in the regulation of Sumoylation. Sumo is a small protein related to ubiquitin that is added to proteins in a process similar to ubiquitination. SENP1 acts to remove Sumo from modified proteins. Insertional mutation of the SENP1 gene leads to an approximately 50% reduction of expression levels in homozygotes. Consistent with reduced levels of this de-Sumoylating enzyme, there is a dramatic increase in the levels of Sumo modified RanGAP1 in homozygous mutant embryos. Homozygous embryos die around midgestation due to umbilical and placental defects, indicating an essential role for Ran mediated nuclear transport in extraembryonic development. As another approach to identify developmentally important genes, we hypothesized that the activity of many developmental regulatory proteins might be regulated by ubiquitin-mediated protein degradation, and that these molecules can be identified by their interaction with E3 ubiquitin ligases, the component of the ubiquitylation pathway conferring specificity. As a first step to identify such proteins, we used the developmentally regulated E3 Nedd-4 in a yeast two-hybrid screen of genes expressed in the midgestation mouse embryo. This allowed us to isolate Nedd-4 Binding Proteins (N4BP) 1-4. N4BP-1, -2 and -3 are encoded by novel genes while NBP4 is a known protein, PLIC2. N4BP-1 and -2 can be ubiquitylated in vitro by Nedd-4. We have now demonstrated that N4BP-2 is poly-ubiquitylated in vivo and that steady state levels of N4BP-2 increase in cells treated with different proteasome inhibitors. This result indicates that N4BP-2 is a bona fide substrate for Nedd-4 mediated ubiquitylation and proteasome degradation, and provides proof of principal that this approach can identify developmental proteins regulated at the level of protein stability. In contrast, we found that N4BP-1 is mono-ubiquitylated in vivo and that increased levels of Nedd-4 enhance the level of mono-ubiquitylation. Mono-ubiquitylation is not a signal for protein degradation, rather it may serve to regulate the location and activity of proteins. Immunohistochemical analysis of N4BP-1 transfected cells revealed a nuclear location, in discrete circular structures also containing Sumo-modified proteins. Most nuclear Sumoylated proteins are found in PML (promyelocytic leukemia) nuclear bodies, including the PML protein itself. PML is a tumor suppressor and in its Sumoylated form can recruit other components to PML bodies. The function of PML bodies is not well understood but they have been implicated in apoptosis, transcription and antigen presentation. Further analysis of N4BP-1 transfected cells showed that PML colocalized with N4BP-1 in the nucleus. In addition, the number and size of PML bodies were significantly increased in N4BP-1 transfected cells. Together these results suggest that N4BP-1 is a new component of PML bodies and, like PML itself, can regulate their assembly. We have found a consensus Sumoylation site in N4BP-1 that when mutated leads to the loss of N4BP-1 mono-ubiquitylation. This suggests that this Sumoylation site is also where ubiquitylation occurs. We are now testing the hypothesis that there is a competition between Sumoylation and mono-ubiquitylation on N4BP-1, with the Sumoylated form participating in PML body formation and the mono-ubiquitylated form kept in the cytosol or outside of PML bodies in the nucleus.